Harry Guerrilla
DP Veteran
- Joined
- Dec 18, 2008
- Messages
- 28,951
- Reaction score
- 12,422
- Gender
- Male
- Political Leaning
- Libertarian
First victim of health care overhaul? - Sarah Kliff - POLITICO.com
I think the new regulations will be problematic for small start up insurance companies because compliance costs can be damaging to smaller firms.
What do you think?
A Virginia-based insurance company says “considerable uncertainties” created by the Democrats’ health care overhaul will force it to close its doors by the end of the year.
The firm, nHealth, appears to be the first to claim that the new law has driven it out of business. “We don’t know what the rules are going to be, and, as a start-up, our investors need certainty,” nHealth CEO and President Paul Kitchen told POLITICO. “The law created so much uncertainty that is beyond our control.”
“The uncertainties in the regulatory climate coupled with new demands imposed by national health care reforms have made it challenging to sustain the level of sales required to remain viable over the long run,” Slabaugh wrote.
The company’s finger-pointing — first reported by the newspaper Richmond BizSense — must be read with caution: For years, employers and health insurance brokers have struggled to keep pace with steeply rising health care costs.
Even without the health reform law, small health insurance firms were operating in a financially challenging landscape. Employers have become increasingly likely to consider dropping coverage as premiums have risen, according to annual surveys by the National Small Business Association. As far back as 2008, a Citigroup survey showed “more insurers were raising premiums at a faster rate than those who reported slowing increases,” according to a Wall Street Journal article at the time.
I think the new regulations will be problematic for small start up insurance companies because compliance costs can be damaging to smaller firms.
What do you think?